Category Archives: Leadership

Do You have a Disaster Recovery Plan? Four Recommendations

Situation: A CEO wants to be prepared in case of emergencies including water, fire, earthquake, and the possibility that owners or employees may have difficulty communicating or traveling to their offices for an extended period. What have others done to create an emergency response plan? Do you have a disaster recovery plan?

Advice of the CEOs:

  • One company developed a disaster recovery plan, including: a communication plan; employees taking notebook computers home in the evening; and data back-up and server restoration capabilities. The plan was relatively easy to build and is summarized in a 4-page document in the possession of each employee.
  • What have others done to address emergency preparedness? Answers included daily systems back-ups; if you use a web-based CRM, check whether they have a disaster recovery program; and assuring that there are sufficient cash reserves to manage through 30 days with no invoicing or collections.
  • Drafting a full emergency plan is essential. Start simply: look at the obvious risks in your location, for each risk that you identify, develop a backup or contingency strategy and put it in place, let the list of contingencies grow over time as you recognize additional risks, and start this exercise now!
  • Once you have a plan, drill the plan. Make sure that employees know what to do in a variety of emergencies so that they are prepared. This can build the confidence that your employees will be able to handle emergencies.

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How Do You On-board a New CFO – Four Imperatives

Situation: A company is hiring their first CFO. Previously, as a small company the founder and an accountant handled this responsibility. How do they integrate this key person into the company? How do you on-board a new CFO?

Advice from the CEOs:

  • The company and its key players should reflect the values, needs and desires of the CEO. The talents of the CEO and CFO should complement each other. Have a clear discussion and agreement with the CFO candidate on values, role, and organizational structure before hiring or announcing anything to the company.
  • Recommended announcements and timeline: When the new CFO is announced, simultaneously present the new organization chart with broad responsibilities, but not with detailed position descriptions. Set a timeline for realignment of roles. It is not necessary to specify exact roles at the time of the announcement. Let everyone know that this is a work in progress and give a time frame within which all will be resolved.
  • Once the CFO is in place, the CEO and CFO should meet at least weekly to assure that the CFO has the support and resources needed to accomplish his/her responsibilities. All decisions within the CFO’s group, personnel responsibilities and any shifts in roles should come from the CFO, with the support of the CEO. This will help the new CFO to assimilate into the company more rapidly and will give him/her the authority needed to manage his/her organization.
  • The CEO may put the CFO in charge of areas that they want to delegate – accounting, administration, finance and contracts. The CEO should remain involved in banking relationships.

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How Do You Develop Leaders? – Five Strategies

Situation: As it has grown, a company has used talent from their home area to seed new locations around the country. As a result, leadership is now short at headquarters. What have others done to fill leadership gaps? How do you develop leaders?

Advice from the CEOs:

  • Develop a formal Leadership Development Program. Identify the top leadership candidates with the company – the top 10%. Identify individual goals of these individuals and determine whether these are consistent with current and emerging company values. Clearly communicate the roles and expectations that you have for future company leaders – both the upsides and the sacrifices that you anticipate that they will have to make. Team the leadership candidates 1/1 with mentors to guide their development.
  • Consider an “internal” Board of Directors for developing leaders. Members are considered advisors to the true Board of Directors, understand company strategy, are coached on company values, and are involved in an advisory capacity in key company decisions.
  • Consider a leadership “boot camp” program to groom potential leaders and weed out those who like the idea of leadership more than the reality.
  • In the case of a very hierarchical company, the following items are involved: time, talent, defining the desired traits for key positions, identifying candidates who appear to possess these traits, assigning leadership roles to these individuals in executing the annual strategic plan – with senior managers mentoring leaders-in-training, and including training and development in individuals’ professional development plans.
  • Investigate employee assessment tools, for example the Myers-Briggs tools.

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How Do You Access Key IP? 3 Steps to the Dance

Situation:  A company is moving from a specialty solution to a complete solution. They have identified a partner with intellectual property (IP) that will help them fulfill this vision. How should the CEO approach this company to access their IP? How do you access key IP?

Advice from the CEOs:

  • There are two aspects of any deal: technical feasibility that will produce both value and the emotional needs of the principals of each company. The technical aspects are the most straightforward and easiest to value. Frequently, a favorable deal hinges not on technical feasibility, but on the desires of the principals and their ability to trust one-another.
  • If you are convinced of the value, you must convince the other party that their best option is to work with you. This accomplished, you can negotiate the specifics. Sell your vision: the technologies together are much more valuable than they are alone: 1 + 1 = 5! If control of the technology is an issue, negotiate an arrangement where they are comfortable with your control. Do you and the other party have a trusted advisor in common or is there an individual who is respected by the principals of both companies? A person like this can help communicate your good intentions.
  • If your best efforts do not produce an appealing arrangement, your fallback position may be a partnership. If the partnership is backed by modest investment with options for future purchase, this can be another way for you to eventually gain control of the technology.

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What are the Pro and Cons of Micromanaging? Three Observations

Situation: A CEO is concerned about the performance of both her company and individual employees. The employees are good, but there are many minor details of day-to-day operation that the CEO feels are important and require her oversight. How involved should the CEO be in the details of the business? What ae the pros and cons of micromanaging?

Advice from the CEOs:

  • The answer to this question depends on you. What is your own priority on the use of your time? How much do you want to be involved? How confident are you in the people whom you’ve hired? Are you comfortable delegating? Do you want to stay small or scale and grow? Your answers to these questions will help you to decide where and when to increase your involvement with or oversight of the business.
  • There are both good and bad aspects of involving yourself in details. The Good Side – it communicates that you are willing to roll up your sleeves and do what it takes to get the job done. The Bad Side – don’t do your employees’ jobs for them. This is demotivating and communicates a lack of trust in their abilities. If the workload is so demanding and the benefit so great, then secure additional resources to enable employees to get the job done themselves.
  • More broadly, remember the advice of many business gurus – you increase the value of your company by getting the “U” out of your bUsiness. You may enjoy the detail of the business. However, do not let this interfere with your long term objective of having others doing the “doing” while you mature your role as manager and leader.

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How Do You Find A-Players? Six Strategies

Situation: An early stage company will be staffing-up over the next year. In the past the CEO has recruited individuals with big company experience and solid resumes, only to find that they had difficulty transitioning to the hands-on responsibility of a small company. How do you find candidates who are highly experienced but who can also excel in a small company environment? How do you find A-players?

Advice from the CEOs:

  • The best candidates are not in the job-search pool. They are currently working but open to a change with new challenges. Some will wish to return to a more hands-on situation.
  • Let people know that you are looking for “the best” and have a great opportunity. Create some buzz. Go to your network and ask, “who do you know?” Don’t be shy!
  • Look for achievers – individuals with proven performance in companies of the size that you plan to be in 12-18 months and who are interested in the excitement of building that company. Check their references carefully.
  • What can the company do now, while seeking the right people? Use contractors and consultants. These people are more entrepreneurial, self-starting, and self-accountable. Monitor their work. If they are good, add them to your team as permanent employees.
  • Develop a milestone-based personnel plan as part of your business plan. For example when we hit Milestone A, we will need an operations manager. When we hit Milestone B, we will need channel or market development expertise.
  • Conduct case studies of how other companies in your or similar spaces have facilitated their scale-ups. What worked? What didn’t? Why?

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How Do You Encourage Managers to Work On vs. In the Business – Four Points

Situation:  A company’s CEO created five customer-centered divisions headed by Business Development Managers (BDMs) who oversee project management as well as business development in their markets. A year after implementation, the BDMs are more focused on managing their teams than on developing new business. How can the CEO enhance focus on business development? How do you encourage managers to work on vs. in the business?

Advice from the CEOs:

  • It appears that the BDMs are technicians. Business development (BD) isn’t their strength. People gravitate toward important/urgent activities in their comfort zone.
  • Supplement your staff with people who have a proven talent for business development. You may not need 5 people – 2 or 3 may be sufficient to support the BDMs.
  • What if our customers demand technical expertise in business development personnel? Make category expertise a requirement when hiring, in addition to experience in BD. There are specific traits that characterize successful BD personnel. Specify these traits in your hiring process and verify these abilities in candidates both by testing for these traits and through reference checks. Sandler Training has good tests for BD talent.
  • The BDMs are responsible for coordinating bidding and pricing. Should this responsibility be handed over to the new BD personnel? Not completely. You have two options. Option A – require BD personnel to coordinate with the BDMs when it comes to pricing and project delivery, or Option B – if you determine that the BD personnel need to be able to negotiate pricing on their own, tie their commission compensation 100% to margin on projects bid.

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How Do You Sell an Annual Plan? Five Points

Situation: A CEO has developed an annual plan. She wants ideas on the best way to communicate the plan to staff, secure buy-in and create accountability for execution. How do you sell an annual plan?

Advice of the CEOs:

  • Communicate your vision for the company and the future as a broad outline so that employees know how they can contribute. Create a picture so that they can see and support your vision. Ask for input on how to implement the plan. Since they will be doing the work, the best way to generate buy-in and accountability is for them to own the implementation plan.
  • You don’t have to share all details of the plan with everyone. If you communicate the plan in parts to those who will implement them, tailor the message to the person, and create individual objectives that will support the overall plan. Connect achievement of objectives to job evaluations.
  • Limit the number of objectives for each person – three key objectives plus one personal development objective. Have each employee develop activities to support achievement of their objectives.
  • Once objectives are in place, conduct regular meetings to review progress against plan and objectives, identify performance obstacles and solutions, and to reinforce the overall vision. The vision must be simple and direct. Consistently repeat and reinforce the message. Publicly recognize individual contributions that support the vision.
  • Establish metrics to track progress toward the vision. Stay on message with each person – focus on their goals and contributions. Be consistent in your words and actions and use them to reinforce the vision.

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Is it Better to Sell or Downsize? Four Perspectives

Situation: A company is losing money and has been approached about a merger. The CEO’s ideal outcome would be to get cash on the table, integrate with the merger partner and continue business. The other alternative – downsizing – may hurt company morale. What are the best options available? Is it better to sell or downsize?

Advice from the CEOs:

  • The realities of mergers: 70% of mergers fail, and the merger process often leaves founders with a minority stake in the company. The experience of others with partners has been disappointing – it’s better to control your own destiny. Look at all alternatives before you jump into a merger. You founded the company and have brought it this far. The company will be a different company following a merger, and not the company that you founded or have led to date.
  • The message to your potential merger partner: Be a reluctant bride. “We are making improvements to return to profitability and I’ve joined a board of CEOs who are consulting me through the process.” If the partner sweetens the offer to keep the merger on the table, make sure that you get 51% of the merged company and retain control of your own fate.
  • Downsizing: Others have found the downsizing experience wrenching, but with more positive results than they expected. A 10% cut resulted in a 30% increase in productivity. Employees once thought to be critical were not missed post-layoff. The employees generally understood more about the situation than the CEO knew, and those remaining responded positively to a restructuring that allowed them to keep their jobs. Some companies used a layoff as an opportunity to cross-train employees and increase company flexibility.
  • Smoothing the layoff process: Communicate with the employees. Let them know the truth and share enough of the situation so that they understand. Challenge employees to come up with ways to save money or make processes more efficient and cost-effective. This can have a remarkable impact. Consider a cross-the-board salary reduction as a temporary alternative to layoffs. Position this as a layoff to restructure expenses – this keeps you on the right side of employment law. Obtain assistance from a personnel consultant who can help to handle the process effectively.
  • Smoothing the layoff process: Communicate with the employees. Let them know the truth and share enough of the situation so that they understand. Challenge employees to come up with ways to save money or make processes more efficient and cost-effective. This can have a remarkable impact. Consider a cross-the-board salary reduction as a temporary alternative to layoffs. Position this as a layoff to restructure expenses – this keeps you on the right side of employment law. Obtain assistance from a personnel consultant who can help to handle the process effectively.

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How Do You Coach a New Manager Who Isn’t Cutting It? Six Points

Situation: A CEO recently hired a new high level manager. To integrate the individual into the company the original set of assignments was limited in scope – to help the manager get to know others within the company. The new manager seems to overanalyze things. Long hours are spent carefully drafting plans but there is little action. How can the CEO manage this individual without micromanaging? How do you coach a new manager who isn’t cutting it?

Advice from the CEOs:

  • It looks like this person is working long but not necessarily productive hours. This is costing you time and money – both yours and your employees. The question is whether the root cause is the individual’s behavior or your own expectations and behavior. Ask yourself the following questions:
  • Have you clearly outlined your expectations in terms of what is to be delivered, the time in which it is to be delivered, and any constraints around the projects for which this person is responsible?
  • Have you provided the necessary resources and empowered the individual to make the decisions required to bring projects to completion?
  • Have you scheduled regular update meetings with this individual and openly discussed project progress and obstacles to completion?
  • Have you set appropriate expectations with your other staff as to the authority of the new individual? Are you honoring those expectations in your own behavior?
  • If you have done these things, and the individual is not performing, then it is time to ask whether you hired the right person.

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